I found this short essay by Albert Einstein very interesting. It validates many of my own views on the subject, most of which I've expressed on this forum. I knew about this essay for some years now but never bothered to find it and read it. I recently stumbled across it and I'm glad I did! Link: https://monthlyreview.org/2009/05/01/why-socialism/ I first noticed ... And I thought of all those on the political right who tell us that economics is economics, and the rules of economics apply to all systems; classical economics are not "capitalist" economics. Clearly Einstein didn't agree, nor did Veblen. Then I see ... YES!! I've often expressed such thoughts only to have RWers reject it as "ridiculous". Now I have Einstein for my defender! LOL!! The next comment that catches my attention is ... And it is an important principle for socialism and it's justification. Excellent! Other most noteworthy comments might be ...
Unfortunately, its principal actual effect is to empower the political predator over the economic predator. Einstein is dreaming if he thinks socialism can change the human genetic predisposition to seek advantage for oneself. What he naively calls the predatory phase of human development is just the institutional environment of privilege, which legally entitles the privileged to benefit from the abrogation of others' rights without making just compensation. I.e., it is merely a phase in the development of our institutions, not of humanity per se. Actually, classical economics is not capitalist. Neoclassical economics is. Classical economics was very clear that the landowner makes no contribution to production and is a pure parasite. Neoclassical economics -- capitalism's PR firm -- agrees with socialism that there is no basic economic difference between the landowner and the factory owner, as land and factories are both subsumed in "the means of production." Both capitalism and socialism are based on denying, obscuring, and suppressing the fact that the factory owner has no power to do anything but offer the worker access to economic opportunity he would not otherwise have, while the landowner has no power to do anything but deprive the worker of access to economic opportunity he would otherwise have. Socialism and capitalism both pretend that these two opposite economic activities are somehow the same. No, that is false. The product is the property of the entrepreneur whose labor, decision and initiative brought all the production factors to bear and thus created the product. The capitalist (who has only provided the entrepreneur with purchasing power) will only get interest if he has contributed his purchasing power to production in the capacity of lender, or dividends if he has taken the additional risk of contributing it in the capacity of owner (i.e., shareholder). No, the essential point is the difference between what the ENTREPRENEUR produces by arranging to bring all the production factors to bear and what the worker contributes to the entrepreneur's product by way of his labor. The worker is of course rightly only paid for the latter because he does not actually produce the product: his labor is just one of three necessary factors that are only applied to production by the entrepreneur's labor, decision, and initiative. The difference is what land and producer goods (which the entrepreneur pays for) contribute. This is easily proved by simply considering the difference between what two similar workers produce on different grades of land: if a worker on marginal land produces x bushels of corn while an equivalent worker on good land produces 3x bushels, the latter worker has not produced the additional 2x bushels; the superior fertility of the land has. Similarly, if a worker on marginal land produces x bushels by his own efforts, but 2x bushels if he uses tools provided by an entrepreneur, only a liar would claim that the latter worker produced the additional x bushels rather than the entrepreneur. It is not free because under capitalism, the landowner has already forcibly removed the worker's liberty right to use the land, depriving him of his options and thus his bargaining power. He consequently has no choice but to offer his labor to employers on whatever terms he can secure, or starve. Socialism consists in blaming the factory owner for what the landowner does to the worker (capitalism consists in blaming the worker for it). It is the entrepreneur who produces the goods, the worker only contributes labor. No, Einstein is ignoring how the landowner has deprived the worker of his bargaining power. Right, because it is the product of the entrepreneur's labor, not the worker's. The worker's wage is determined by the value of his labor contribution.
